11‐1427 E.M. v. New York City Department of Education

United States Court of Appeals FOR THE SECOND CIRCUIT

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August Term, 2012

(Argued: February 5, 2013 Decided: July 11, 2014)

Docket No. 11‐1427‐cv

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E.M., AS PARENT AND NATURAL GUARDIAN OF N.M., AN INFANT,

Plaintiff‐Appellant, –v.–

NEW YORK CITY DEPARTMENT OF EDUCATION,

Defendant‐Appellee.

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B e f o r e:

KEARSE, JACOBS, AND CARNEY, Circuit Judges.

————————— Plaintiff‐appellant E.M., the parent of a disabled child, brought this action under the Individuals with Disabilities Education Act,

, et seq. (the “IDEA”), asserting that defendant‐appellee the New York City Department of Education (the “Department”) denied her child the free appropriate public education that the IDEA requires. She seeks direct tuition payment for the 2008‐ 2009 school year to the private school where she unilaterally enrolled her child. The district court (Batts, J.) determined, first, that plaintiff had standing to pursue her claim for direct payment, although she had not paid any tuition to the private school. The district court denied plaintiff’s claim on the merits, however, ruling that the Department’s proposed Individualized Education Program (”IEP”) would have provided plaintiff’s child a free appropriate public education. We conclude that: (1) plaintiff has standing to pursue this claim because she is legally obligated to pay tuition to her child’s private school, even if that obligation may not be enforced unless and until she is successful in her legal challenge to the Department’s proffered IEP; and (2) the district court erred in affirming the decision of the state administrative officer as to the adequacy of the IEP, because the officer impermissibly relied on retrospective evidence extrinsic to the IEP in assessing the adequacy of the educational services that would have been provided by the Department. We therefore VACATE the judgment in favor of the Department, and REMAND the cause to the district court for further proceedings in light of our recent case law concerning the evidence that may be considered in determining the adequacy of an IEP.

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WILLIAM B. ADAMS (Ellison S. Ward, on the brief), Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for Plaintiff‐Appellant.

JULIE STEINER (Edward F.X. Hart, G. Christopher Harriss, Brian Reimels, John Buhta, on the brief), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, NY, for Defendant‐Appellee.

Rebecca C. Shore, New York, NY, for amici curiae Advocates for Children of New York, Legal Services NYC Bronx, Manhattan Legal Services, New York Lawyers for the Public Interest, Queens Legal Services, and South Brooklyn Legal Services in support of Plaintiff‐Appellant.

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SUSAN L. CARNEY, Circuit Judge:

Plaintiff E.M. is a mother with limited financial means who is raising a

severely disabled child in New York City. In 2008, E.M. unilaterally withdrew

her daughter, N.M., from public school and enrolled her in a private learning

center, asserting that the New York City Department of Education (the

“Department”) failed to provide N.M. with the free appropriate public education

that is required by the Individuals with Disabilities Education Act,

, et seq. (“IDEA”).1 Although E.M. has not paid — and is likely unable to

pay out‐of‐pocket — any tuition to the private school, she brought this action

against the Department seeking a court order that would direct the Department

to pay the private school, retroactively, the amount of her daughter’s tuition for

the 2008‐2009 school year.

This case raises two independent questions: first, whether E.M. has Article

III standing to sue the Department under the IDEA for direct, retroactive

payment of private school tuition for 2008‐2009; and second, whether E.M.’s legal

challenges to the Department’s proffered Individualized Education Program

1 In 2004, the IDEA was reauthorized and amended by the Individuals with Disabilities Education Improvement Act (“IDEIA”), Pub. L. No. 108‐446,

. We continue to refer to the statute, as amended, by the familiar acronym: IDEA. 3 (“IEP”) have merit.2 We answer the first question in the affirmative. Although

there is reason to believe that the school may not seek to enforce the obligation

absent success by E.M. in her IDEA challenge to the Department’s IEP, E.M. was

legally obligated by the enrollment contract that she signed to pay tuition to the

private school. Contrary to the state hearing officer, we conclude that this legal

obligation gives E.M. standing under Article III to pursue her challenge to the

IEP and seek direct retroactive tuition payment. As to the second question, we

determine, based on recent Circuit precedent, that because the state

administrative officer impermissibly relied on retrospective evidence extrinsic to

the IEP in determining that the IEP provided the “free appropriate public

education” (“FAPE”) required by the IDEA,3 the district court erred in affirming

the state officer’s decision. See E.M. v. New York City Dep’t of Educ., No. 09 Civ.

10623 (DAB),

(S.D.N.Y. Mar. 14, 2011). The record before us,

however, does not permit us to resolve the merits of E.M.’s challenge to the IEP.

2 The decision in this case was held pending the issuance of C.F. ex rel. R.F. v. New York City Dep’t of Educ.,

(2d Cir. 2014), decided March 4, 2014.

3 Congress enacted the IDEA “to ensure that all children with disabilities have available to them

a free appropriate public education . . . designed to meet their unique needs . . . [and] to ensure that the rights of children with disabilities and parents of such children are protected.”

(d)(1)(A)‐(B) (emphasis added).

4 We therefore remand the cause to the district court for further proceedings

consistent with this opinion.

BACKGROUND

I. Factual Background4

A. N.M.’s Disability and Schooling

N.M. was born in March 2002. She is severely autistic. When she had

passed her eighth birthday (in April 2010), she was entirely non‐verbal, had a

limited attention span, and was prone to self‐stimulatory and injurious

behaviors, including drumming her fingers on her lips, “spinning” instead of

walking in a straight line, and continually poking her eyes. She exhibited

potentially harmful “mouthing behaviors,” including placing objects like shaving

cream and chalk in her mouth. She also faced substantial physical limitations,

which required her to use (among other therapies) “fixed ankle foot orthotics” to

prevent her calf muscles from shortening. Joint Appendix (“J.A.”) at 786.

N.M. began attending a private pre‐school called Reach for the Stars

Learning Center (“RFTS” or the “Center”) in 2005, when she was three years of

4 The factual statement is drawn primarily from the district court’s opinion and the administrative record. It is not subject to dispute by the parties except where noted.

5 age.5 During her time at the Center, N.M. received one‐on‐one (“1:1”) Applied

Behavioral Analysis (“ABA”) therapy throughout the school day.6 It was the

view of the associate educational director of the Center, Helene Wasserman, who

later testified before the state hearing officer, that N.M. was “in need of a one to

one [supervision] at all times. Her behaviors seriously interfere[d] with her

learning . . . [and] she had a lot of self[‐]injurious behaviors that needed a lot of

direct care . . . .” J.A. 575‐76.

In March 2008, a New York City Department of Education Committee on

Special Education (the “Committee”) was convened to create an IEP for N.M. for

her kindergarten year, upcoming in September 2008.7 The IEP prepared by the

Committee recognized that N.M. required “highly intensive” supervision, J.A.

691, but it did not provide for full‐time 1:1 instruction. Instead, it called for N.M.

5 The record is unclear as to whether E.M. paid tuition to RFTS for N.M.’s pre‐school education.

6 ABA is an “intensive one‐on‐one therapy that involves breaking down activities into discrete tasks and rewarding a child’s accomplishments.” R.E. v. New York City Dep’t of Educ.,

(2d Cir. 2012) (internal quotation marks omitted). Instructors adept in ABA “use[ ] careful behavioral observation and positive reinforcement or prompting to teach each step of a[n appropriate] behavior.” M.H. v. New York City Dep’t of Educ.,

, 226 n.5 (2d Cir. 2012).

7 An IEP is a “written statement that sets out the child’s present educational performance,

establishes annual and short‐term objectives for improvements in that performance, and describes the specially designed instruction and services that will enable the child to meet those objectives.” M.H.,

(internal quotation marks omitted). 6 to be placed in a special education classroom with a staffing ratio of 6:1:1 (six

students for every one teacher and one paraprofessional), and directed that N.M.

receive instruction on a twelve‐month calendar. It also included a Behavioral

Intervention Plan (“BIP”) for N.M., and it recommended, among other things,

that the Department (1) provide 1:1 occupational therapy for thirty minutes twice

a week; (2) provide 1:1 physical therapy for thirty minutes twice a week; and (3)

provide 1:1 speech and language therapy for forty‐five minutes three times a

week. In other words, under the IEP proffered by the Department, N.M. was

slated to receive a total of four hours and fifteen minutes of 1:1 educational

services each week.

B. Re‐enrollment in RFTS

E.M. evaluated the Department’s recommended public classroom

placement for her daughter in early summer 2008, and found it unsuitable. In

her view, where there were more students than teachers in the classroom, it

would be impossible for her child to receive the very close supervision that she

needed, and which E.M. believed should be 1:1 during the whole school day.

On August 15, 2008, E.M. notified the Department that she would re‐enroll

N.M. at the Center for the 2008‐2009 school year. Three days later, she formally

7 enrolled N.M. there by signing an enrollment contract. The executed contract

provides that E.M. and her husband “assume . . . complete financial

responsibility for the enrollment of [N.M. at RFTS] for the year 2008‐2009,” and

that they agree “to pay when due the Annual Tuition and Fees.” J.A. 759. The

contract specifies an annual tuition of $85,000, but leaves blank the spaces

provided for designating a payment schedule and the amount of a deposit that

“must accompany this signed Contract to make it valid.”

In an affidavit, Nancy Levy, General Co‐Director of RFTS, explained that

as of November 12, 2008, the Center had received no tuition payment for N.M.,

but that the parents and school had agreed that E.M. and her husband would

contact an “advocate or attorney and seek funding” from the Department.8 J.A.

758. E.M. later testified that, as of May 2009, she had not paid any tuition to the

Center for the 2008‐2009 school year because “we don’t have that money to pay

the school.” J.A. 536.9

8 Ms. Levy’s statement appears to refer to an oral side agreement that was never reduced to a signed writing, and whose exact terms are unclear from the record. The only signed writing between E.M. and the Center that we see in the record is the enrollment contract itself, which Levy elsewhere stated constituted “the entire tuition agreement signed by the parent.” J.A. 758.

9 The record suggests that E.M.’s household income during the relevant period was less than

$15,000 per year. See J.A. 539‐40. 8 C. Due Process Complaint

By letter dated November 26, 2008, E.M. (through counsel) submitted to

the Department a request for an impartial hearing under the IDEA. The request

stated that E.M. “rejected the recommended program because she maintains that

[N.M.] requires one to one teaching across all domains to master any skill.” J.A.

750.

D. December 2008 IEP

In December 2008, the Department convened a second Committee and

amended the first proposed 2008‐2009 IEP for N.M., taking into account new

evidence submitted by Department officials who had observed N.M. at the

Center and the reports on N.M.’s progress that were made by Center employees.

The new evidence included a classroom observation report completed by a

Department official, who observed that N.M. “pokes her eyes, bangs her head

and throws herself backwards onto the floor. She is self‐injurious and aggressive

to others. She jumps, gallops and flaps.” J.A. 123. Although the amended IEP

expanded N.M.’s access to related services, it did not alter the Committee’s

previous recommendation that N.M. be placed in a 6:1:1 classroom. J.A. 737.

E.M. renewed her challenge to the Department’s proffered IEP.

9 II. Procedural History

A. IHO Opinion

Between March and May 2009, the Department and E.M. submitted

evidence to an Impartial Hearing Officer (“IHO”) charged with addressing

E.M.’s allegations that, like the earlier IEP, the December 2008 IEP was

substantively deficient because (among other flaws) it did not provide N.M with

all‐day 1:1 supervision.10

In a written opinion issued in June 2009, the IHO denied N.M.’s request for

tuition reimbursement or direct payment to the Center. Declining to address the

substantive question whether N.M. would have received a FAPE in the

educational setting proposed by the IEP, the IHO concluded instead that, as

argued by the Department, E.M. lacked standing to bring a claim for tuition

reimbursement because she “has paid nothing to [RFTS] for Student’s enrollment

there during the 2008‐2009 school year, nor does it appear that [she] is in any

way obligated to do so.” J.A. 192. The IHO found that, when E.M. enrolled her

daughter in RFTS, she was “clearly without the financial resources that would

10 The IHO presides at the IDEA‐mandated “impartial due process hearing,”

(f), hosted by the local school district — in this case, the New York City Department of Education. In New York State, the IHO’s decision may be appealed to a State Review Officer. M.H., 685 F.3d at 224‐25.

10 have permitted the incurrence of such debt,” and therefore she had not incurred

any financial risk or obligation. J.A. 191, 193. The IHO further rejected E.M.’s

request for an order directing the Department to pay the Center directly,

reasoning that the IDEA restricts “the right and opportunity to seek recourse

under its provisions solely to parties for whom [the] legislation was intended —

the disabled and the parents of the disabled.” J.A. 193‐94. According to the IHO,

the Center — not E.M. — was the real party in interest with respect to plaintiff’s

direct payment request, and because the Center has no legal remedy under the

IDEA, E.M.’s request for direct payment had to be denied.

B. SRO Opinion

Plaintiff appealed to a State Review Officer (“SRO”), who reviewed the

written record de novo. The SRO agreed with the IHO that E.M. lacked standing

to request that the state pay her daughter’s tuition to the Center for the 2008‐2009

school year. Departing from the IHO’s approach, however, the SRO also chose to

consider, for the first time, “the parent’s allegation that the district did not offer

the student a FAPE during . . . 2008‐09.” J.A. 130.

On that issue, the SRO reviewed the record developed before the IHO and

concluded that “the special education program recommended by the

11 [Department] for the student’s 2008‐09 school year appropriately addressed

[N.M.’s] unique special education needs.” J.A. 137. The SRO found that the

“evidence establishe[d] that the March 5, 2008 IEP was appropriate for the

student because her cognitive, academic, and social delays prevented her from

participation in the general education environment and that the district’s 6:1+1

special class, with programmatic supports, would enable the student to receive

educational benefits.”

(internal quotation marks omitted). Although the SRO

did not identify with precision the “programmatic supports” that would render

the 6:1:1 classroom sufficient for N.M. to receive an educational benefit, he relied

in part on testimony from a teacher in N.M.’s proposed public school classroom

who testified at the hearing before the IHO that, in the SRO’s words, “[i]f the

student required 1:1 attention during the entire school day . . . [the teacher]

would make sure that either she or a paraprofessional worked with the student

at all times, having done so previously for another student during the first two

months of the school year, until that student became more independent.” J.A.

136.

12 C. District Court Opinion

On December 31, 2009, E.M. filed suit in Federal District Court for the

Southern District of New York, asserting that the Department had denied her

daughter a FAPE and seeking reversal of the SRO’s decision. Among other

remedies, E.M. sought an order requiring the Department to make direct

payment of N.M.’s tuition for the 2008‐2009 school year to RFTS.

The district court decided, first, that E.M. had standing to bring this suit

even if she had not paid tuition to RFTS. See E.M.,

, at *6. In

support of its ruling on standing, the court quoted favorably from another

district court decision within this Circuit, S.W. v. New York City Department of

Education,

(S.D.N.Y. 2009), which held that the denial of a

FAPE, without more, constitutes an injury sufficient for a parent to satisfy the

standing requirement. See

.

Next, the district court addressed whether N.M. had been provided a

FAPE. Because the IHO had not reached this issue, the only relevant factual

findings were made by the SRO as part of its alternative analysis. The district

court ruled that the SRO considered all of the relevant evidence, properly

concluded that N.M. had a possibility of advancement in the 6:1:1 classroom, and

13 did not err in concluding that the IEP was substantively adequate. E.M.,

, at *8‐10. As part of its analysis, the district court noted that, at the

time of its decision, no Second Circuit cases “st[ood] for the proposition that an

SRO may not consider evidence extrinsic to the written IEP.”

. Therefore,

“[i]t was not error for the SRO to consider [testimony about the nature of the

placement actually offered for N.M. in the IEP],” and the “SRO’s judgment that

the 6:1:1 placement was likely to confer educational benefits is therefore

deserving of deference.” Id.11 The court denied plaintiff’s request that the

Department remit N.M.’s tuition to RFTS.

Plaintiff timely appealed

DISCUSSION

I. Standing

The Department did not cross‐appeal the district court’s ruling on

plaintiff’s standing under Article III to pursue her claim for direct payment.

Because it affects our subject‐matter jurisdiction, however, we are obligated to

consider the question of our own accord.

11 The district court also concluded that the Department had not violated N.M.’s procedural rights under the IDEA by denying N.M. a Functional Behavioral Assessment. It was deemed unnecessary because the Department had created a BIP that adequately considered “behavioral interventions and strategies to the extent required by IDEA.”

.

14 A. Background Principles

Article III, Section 2, of the United States Constitution limits federal courts’

jurisdiction to “Cases” and “Controversies.” As part of this limitation, parties

seeking to bring suit in federal court must establish standing under Article III to

assert their claims.

In Lujan v. Defenders of Wildlife,

(1992), the Supreme Court

articulated three separate requirements for constitutional standing. First, the

plaintiff must have suffered an “injury in fact,” — that is, “an invasion of a

legally protected interest which is (a) concrete and particularized and (b) actual

or imminent, not conjectural or hypothetical.”

(internal citations,

quotation marks, and footnote omitted). Second, “there must be a causal

connection between the injury and the conduct” of which the plaintiff complains.

And third, “it must be likely, as opposed to merely speculative, that the

injury will be redressed by a favorable decision.”

(internal quotation

marks omitted). At issue in this case are the first and third of these requirements:

injury in fact and redressability.

Whether a plaintiff has suffered an injury in fact turns neither on the

plaintiff’s subjective experience of the harm she alleges nor on the “merits of the

15 plaintiff’s contention that particular conduct is illegal.” Warth v. Seldin,

(1975); see also William A. Fletcher, The Structure of Standing,

, 229‐34 (1988). Rather, whether a plaintiff has standing to assert a claim in

federal court depends on “the nature and source of the claim asserted.” Warth,

; see also W.R. Huff Asset Mgmt. Co. v. Deloitte & Touche LLP,

, 106‐07 (2d Cir. 2008). In essence, the standing question is determined

by “whether the constitutional or statutory provision on which the claim rests

properly can be understood as granting persons in the plaintiff’s position a right

to judicial relief.” Warth,

; see generally Richard H. Fallon, Jr., John

F. Manning, Daniel J. Meltzer & David L. Shapiro, HART & WECHSLER’S THE

FEDERAL COURTS & THE FEDERAL SYSTEM 140‐48 (6th ed. 2009) (discussing

Congress’s power to confer standing to sue by statute). “While the injury‐in‐fact

requirement is a hard floor of Article III jurisdiction that cannot be removed by

statute, it has long been recognized that a legally protected interest may exist

solely by virtue of statutes creating legal rights, the invasion of which creates

standing, even though no injury would exist without the statute.” Donoghue v.

Bulldog Investors Gen. P’ship,

(2d Cir. 2012) (internal quotation

marks and citations omitted).

16 As for the third requirement of constitutional standing — that the harm

alleged be redressable by a favorable decision — the Supreme Court has

instructed that the “necessity that the plaintiff who seeks to invoke judicial

power” be in a position to benefit in some personal way “remains an Art. III

requirement.” Simon v. E. Ky. Welfare Rights Org.,

(1976); see also

Coal. of Watershed Towns v. EPA,

(2d Cir. 2008) (“‘Relief that

does not remedy the injury suffered cannot bootstrap a plaintiff into federal

court.’” (quoting Steel Co. v. Citizens for a Better Env’t,

(1998))). A

plaintiff need not demonstrate with certainty that her injury will be cured by a

favorable decision, but she must at least make a showing that there is a

“substantial likelihood that the relief requested will redress the injury claimed.”

Duke Power Co. v. Carolina Envtl. Study Grp., Inc.,

, 75 n.20 (1978)

(internal quotation marks omitted); see also W.R. Huff, 549 F.3d at 106‐07 (defining

“redressability” as “a non‐speculative likelihood that the injury can be remedied

by the requested relief”). This requirement lies at the core of the standing

doctrine. As commentators have noted, “An abstract decision without remedial

consequence seems merely advisory, an unnecessary expenditure of judicial

resources that burdens the adversary and carries all the traditional risks of

17 making bad law and trespassing on the provinces of the executive and

legislature.” Wright, et al., 13A FED. PRAC. & PROC. § 3531.6 (3d ed. 2008).

B. Standing in the IDEA Context

The IDEA is concerned fundamentally with making educational

opportunities available to disabled children, free of charge to them and their

families. See Florence Cnty. Sch. Dist. Four v. Carter ex rel. Carter,

(1993) (“Carter”) (“IDEA was intended to ensure that children with disabilities

receive an education that is both appropriate and free.”). As the Supreme Court

has explained, the Act also recognizes parents’ unique and personal stake in their

child’s educational progress. In Winkelman ex rel. Winkelman v. Parma City Sch.

Dist.,

(2007), for example, the Court held that parents have standing

to pursue IDEA claims on behalf of their child or on their own behalf.

.

As the Court there observed, the IDEA “requires, in express terms, that States

provide a child with a free appropriate public education ‘at public expense,’ . . .

including specially designed instruction ‘at no cost to parents.’”

at 532

(quoting

(9)(A), (29)). The Court concluded that “[p]arents may

seek to enforce this mandate through the federal courts . . . , because among the

rights the[] [parents] enjoy is the right to a free appropriate public education for

18 their child.” Id.; see also Heldman ex rel. T.H. v. Sobol,

(2d Cir.

1992).

The remedies available under the IDEA and the urgency of a child’s

educational needs complicate the applicable standing analysis. For example,

when parents believe the local public school district has denied their child a

FAPE, one option available to them is to keep the child enrolled in public school

and seek administrative (and, later) judicial review of the child’s IEP for the

purpose of obtaining “compensatory” education. See Somoza v. New York City

Dep’t of Educ.,

(2d Cir. 2008).12 Courts have long recognized,

however — in light of the irreversibility, in an educational setting, of a child’s

lost time — that parents challenging an IEP may also unilaterally withdraw their

child from the public school district, and obtain “reimburse[ment] . . . for their

expenditures on private special education for [that] child if [a] court ultimately

determines that such placement, rather than a proposed IEP, is proper under the

Act.” Sch. Comm. of Town of Burlington, Mass. v. Dep’t of Educ. of Mass.,

(1985) (“Burlington”); see also Carter,

(stating that, under

12 “‘Compensatory education’ is prospective equitable relief, requiring a school district to fund education beyond the expiration of a child’s eligibility as a remedy for any earlier deprivations in the childʹs education.” Somoza,

n.2.

19 Burlington, parents who “unilaterally change their child’s placement during the

pendency of review proceedings, without the consent of state or local school

officials, do so at their own financial risk,” and “are entitled to reimbursement

only if a federal court concludes both that the public placement violated IDEA

and that the private school placement was proper under the Act” (internal

quotation marks omitted)). Thus, under what has come to be known as the

“Burlington‐Carter test,” parents who have unilaterally placed their child in

private school will be entitled to reimbursement if (1) the school district’s

proposed placement violated the IDEA, (2) the parents’ alternative private

placement is appropriate to meet the child’s needs, and (3) equitable

considerations favor reimbursement. C.F. ex rel. R.F. v. New York City Dep’t of

Educ.,

(2d Cir. 2014).13

13 In 1997, following the Supreme Court’s decisions in Burlington and Carter, Congress amended the IDEA and added a statutory unilateral withdrawal and reimbursement remedy. See

(a)(10)(C)(ii). In Forest Grove School District v. T.A.,

(2009), the Supreme Court examined the 1997 amendments, and held that they did not alter the Burlington‐ Carter framework. See

at 239‐40. The Court explained that the amendments “preserved the Act’s purpose of providing a FAPE to all children with disabilities” and “did not change the text of the provision we considered in Burlington, § 1415(i)(2)(C)(iii), which gives courts broad authority to grant ‘appropriate’ relief, including reimbursement for the cost of private special education when a school district fails to provide a FAPE.” Id. at 239. We therefore continue to look to Burlington and Carter for guidance on the scope of the remedies contemplated under the IDEA. 20 As the Supreme Court observed in the seminal Burlington decision, the

administrative and judicial review process “is ponderous.”

.

Unilateral withdrawal, therefore, will in most cases be the parents’ most

attractive option when faced with an IEP to which they object:

A final judicial decision on the merits of an IEP will in most instances come a year or more after the school term covered by that IEP has passed. In the meantime, the parents who disagree with the proposed IEP are faced with a choice: go along with the IEP to the detriment of their child if it turns out to be inappropriate or pay for what they consider to be the appropriate placement. If they choose the latter course, which conscientious parents who have adequate means and who are reasonably confident of their assessment normally would, it would be an empty victory to have a court tell them several years later that they were right but that these expenditures could not in a proper case be reimbursed by the school officials.

(emphasis added). Faced potentially with years of litigation to correct an IEP

they consider deficient, parents have every incentive to enroll their child in a

more suitable school environment while the review process takes its course.

In the quoted text, the Burlington Court seemed to cast the unilateral‐

withdrawal option as being available — as a practical matter — only to

“conscientious parents with adequate means” to foot the bill for private school

tuition while their IDEA claims are adjudicated.

(emphasis added). But the

question we encounter here — whether such a remedy is available under the

21 IDEA to parents without adequate means — was not the Burlington Court’s focus.

The IDEA promises a free appropriate education to disabled children without

regard to their families’ financial status.

As represented in briefs by amici: “Low‐income parents — unlike parents

with more resources — cannot afford to pay for tuition at an appropriate private

school and seek reimbursement later,” but there are some private schools that

“are willing to allow low‐income students to begin attending without an

advanced tuition payment while the students’ parents pursue their due process

remedies [under the IDEA].” Amici Curiae Letter Br. of Advocates for Children of

New York, Legal Services NYC Bronx, Manhattan Legal Services, New York

Lawyers for the Public Interest, Queens Legal Services, and South Brooklyn

Legal Services in support of Plaintiff‐Appellant (“Amici Letter Br.”) at 4.

Recognizing this practice, a growing number of our district courts have recently

held that the IDEA permits courts, in appropriate cases, not only to order

“reimbursement” of tuition costs to parents, but also to order retrospective

payment of tuition directly to the private school where a parent has unilaterally

22 enrolled her child.14 See, e.g., Mr. & Mrs. A. ex rel. D.A. v. New York City Dep’t of

Educ.,

(S.D.N.Y. 2011) (Gardephe, J.) (“Mr. & Mrs. A.”)

(“Where, as here, parents lack the financial resources to ‘front’ the costs of

private school tuition, and in the rare instance where a private school is willing

to enroll the student and take the risk that the parents will not be able to pay

tuition costs — or will take years to do so — parents who satisfy the Burlington

factors have a right to retroactive direct tuition payment relief.”).15

14 Although E.M. is seeking “retroactive,” rather than “prospective,” funding of tuition, we note that courts have long held that, when a state‐level administrative authority determines that a proposed IEP is inadequate and the disabled child lacks the financial means to meet the cost of private‐school tuition pending a final decision on the merits, courts may order the public school district to pay, prospectively, the cost of private‐school tuition as the administrative and judicial process unfolds. See, e.g., Susquenita Sch. Dist. v. Raelee S. ex rel. Heidi S.,

, 85‐87 (3d Cir. 1996) (“The purpose of the Act, which is to ensure that every child receive a ‘free and appropriate education’ is not advanced by requiring parents, who have succeeded in obtaining a ruling that a proposed IEP is inadequate, to front the funds for continued private education.”); see also Connors v. Mills,

, 802‐06 (N.D.N.Y. 1998) (stating, in dicta, that when the Burlington‐Carter factors are met, the IDEA permits district courts to order prospective funding for a unilateral placement in appropriate circumstances).

15 See also P.K. ex rel. S.K. v. New York City Dep’t of Educ.,

(E.D.N.Y. 2011)

(Johnson, J.) (“[W]here the parents have prevailed on each of the three prongs of the Burlington‐ Carter test, the IDEA authorizes a court ‘to award retroactive direct payment of private school tuition.’” (quoting Mr. & Mrs. A.,

)), affʹd,

(2d Cir. 2013); W.W. v. New York City Dep’t of Educ., No. 12 Civ. 7196,

, at *2 (S.D.N.Y. Mar. 31, 2014) (Torres, J.) (“If the parent lacks the financial resources necessary to front the costs of private school tuition, the parent may request direct retroactive payment to the private school.”); A.R. ex rel. F.P. v. New York City Dep’t of Educ., No. 12 Civ. 4493,

, at *10‐11 (S.D.N.Y. Sept. 23, 2013) (Crotty, J.) (agreeing with “Judge Gardephe’s well‐reasoned opinion in Mr. & Mrs. A. that a court’s broad discretion to grant such relief as is appropriate under

(i)(2)(C)(iii) includes the power, in a proper case, to award retroactive direct payment of private school tuition” (internal quotation marks and alternations omitted)). 23 In this case, both parties agree (as do we) that the broad spectrum of

equitable relief contemplated under the IDEA encompasses, in appropriate

circumstances, a “direct‐payment” remedy.16 Cf. Frank G. v. Board of Educ. of Hyde

Park,

(2d Cir. 2006) (noting that the IDEA “confer[s] broad

discretion on the district court to grant relief it deems appropriate to parents of

disabled children who opt for a unilateral private placement” (citing

(i)(2)(C)(iii))). Indeed, where the equities call for it, direct payment fits

comfortably within the Burlington‐Carter framework: like reimbursement, direct

payment to the private school that provided the required educational program

“merely requires [the school district] to belatedly pay expenses that it should

have paid all along and would have borne in the first instance had it developed a

proper IEP.” Burlington, 471 U.S. at 370‐71. It also furthers the IDEA’s remedial

purposes by extending the unilateral withdrawal option to parents with limited

financial means, who otherwise could not avail themselves of it. See

(“The [IDEA] was intended to give handicapped children both an appropriate

16 The Department informs us that, “[w]hile [it] agree[s] that direct payment to a private school is an appropriate remedy under the IDEA under certain circumstances, see Mr. and Mrs. A v. New York City Dept. of Educ.,

(S.D.N.Y. 2011), such action must be made contingent upon a showing by the plaintiff of a legal obligation to pay the school should the plaintiff’s attempt at payment [through IDEA litigation against the Department] be unsuccessful, lest the standing requirement be rendered a nullity.” Appellee’s Letter Br. at 2. 24 education and a free one; it should not be interpreted to defeat one or the other of

those objectives.”).

Applying the direct‐payment remedy in practice, however, highlights

some of the tensions between the statutory enforcement mechanisms available

under the IDEA and the standing requirements of Article III. If the parents of a

special needs child who is enrolled in a private school have not paid tuition and

are not legally obligated to do so, then their standing to pursue IDEA remedies

may be called into question. As discussed above, we must ask whether they

have suffered an injury in fact. And even if they have, we must inquire further

as to how direct tuition funding will redress this injury.

The parties have directed us to only a handful of cases that have addressed

these or similar questions. In deciding that E.M. satisfied the elements of

constitutional standing, the district court here relied primarily on S.W. v. New

York City Department of Education,

(S.D.N.Y. 2009). There, the

district court faced the question whether a parent who alleged that her child had

been denied a FAPE had standing to seek direct payment of her child’s tuition to

the private school where she had unilaterally enrolled her child. See

at 354‐55.

The court set out the standing problem before deciding that standing existed.

25 The parent’s contract with the private school recited that the parent was

“dependent upon receiving prospective payment from [the district] in order to

make the payment of tuition.”

(alterations omitted). The court

therefore determined that the plain language of the contract “relieved S.W. of

financial responsibility in the event that the [the district] refused to pay her son’s

2005‐2006 tuition.”

. Further, because the parent had “not submitted

any evidence that [the private school] believes her to be responsible for tuition

payment, nor that they would otherwise seek to hold her liable for

noncompliance with the contract,” the court concluded that the parent had not

asserted an injury in fact based on any financial indebtedness to the private

school.

Nonetheless, the court in S.W. ultimately decided that the parent had

standing to assert her claims. Her injury in fact arose not from a financial

obligation to the private school, the court reasoned, but from her statutory right

to receive a free and appropriate education for her child, at public expense. See

at 358‐59. The school district argued that this type of injury could not be

redressed by the relief there requested — direct payment to the private school.

26 But the court dismissed this argument in light of the language and structure of

the IDEA:

The IDEA requires school districts to provide disabled children with a FAPE, which is defined by the statute, in relevant part, as “special education and related services that . . . have been provided at public expense . . . .“ Here, it is undisputed that [the child] received an appropriate education at [the private school], but importantly, that education was not provided at public expense. If the Court orders the [district] to pay [the child’s] tuition to [the private school], as [the parent] requests, [the child] will have received a FAPE, that is, an appropriate education at public expense.

at 359 (quoting

(9)).

The Fourth Circuit reached a different conclusion in Emery v. Roanoke City

School Board,

(4th Cir. 2005), a case relied on by the Department. In

Emery, after the public school district failed to prepare an IEP, the father of a

disabled child sought reimbursement for payments in amounts totaling over

$200,000 that were made to a private, residential educational institution. See

at 296‐97. The father’s medical insurer had paid the charges for the child’s six‐

month stay in the facility, however, and the father first sought reimbursement for

the insurer’s costs years after the payments were made. The Fourth Circuit

concluded that the father lacked standing to seek reimbursement for the insurer’s

payments. See

at 299‐300.

27 In reaching that conclusion, the Emery Court addressed the two injuries‐in‐

fact that might arise from a district’s failure to provide a disabled child with the

educational services she requires: denial of a FAPE and financial injury. The

court reasoned that although a plaintiff may allege an injury in fact arising solely

from the denial of a FAPE, the denial of that FAPE was not redressable by the

requested relief of tuition payments for an educational term already long passed.

See

. In addition, because the plaintiff “waited numerous years to bring”

the suit, there would be no way for the district to remedy its past failure to

provide a FAPE through the provision of remedial services.

The court further

held that, although a plaintiff may allege a financial injury arising from the

outlay of personal funds to pay for private education, since this injury “is a

subsidiary of and dependent upon the child’s failure to receive a proper

education under the IDEA,” the plaintiff in Emery failed to establish that he

suffered any form of monetary loss.

“Crucially for the purposes of standing,”

the court held, “he suffered no out‐of‐pocket loss himself for the services that

[the private institution] provided,” and he “failed to show how awarding him

[reimbursement] would be anything other than a windfall.”

28 C. Application Here

1. The Parties’ Arguments

The Department argues here that the district court erred in concluding that

plaintiff had standing to pursue a direct‐payment remedy. Adopting the view

that “plaintiff’s claimed denial of a FAPE is her grievance, [but her] injury in fact

for purposes of determining standing can only be viewed in financial terms,”

Appellee’s Letter Br. at 2, the Department argues that the evidence —

particularly the affidavit from Nancy Levy, General Co‐Director of RFTS —

supports the conclusion that plaintiff has neither paid the Center tuition nor is

obligated to do so. The Department contends, “[W]here a plaintiff has paid

nothing to the school and, more importantly, where there is no evidence that the

plaintiff is even obligated to do so in the future . . . an award of direct payment to

the private school, while theoretically righting [plaintiff’s] grievance in the

abstract, does nothing to redress any actual, concrete injury suffered by the

plaintiff.”

Plaintiff and her amici counter that E.M. has suffered two independent

injuries. First, relying heavily on S.W., plaintiff argues that she has suffered an

injury in fact arising solely from the Department’s failure to provide her child

29 with a publicly funded FAPE. Second, she argues that she is in fact financially

obligated to the Center, and that the Center — in the Department’s stead — did

provide an appropriate education. She cites to the plain language of the duly

executed enrollment contract, which (as described above) provides that E.M. and

her husband “assume, jointly and severally, complete financial responsibility for

the enrollment [of their child] in [RFTS] for the year 2008‐2009 and agree to pay

when due the Annual Tuition and Fees.” J.A. 759‐61. This financial obligation,

she contends, creates an injury in fact.

Direct payment of tuition would redress both of these injuries, according

to E.M. With regard to the denial of a FAPE, direct payment would ensure that

plaintiff’s child was provided a free appropriate public education in 2008‐2009 at

public expense, as provided for by the statute. With regard to plaintiff’s financial

injury, direct payment would relieve plaintiff of her obligation to pay tuition to

the Center.

2. Plaintiff Has Standing to Seek Direct Payment under the IDEA Based on Her Contractual Obligations to RFTS

Based on the record before us, we conclude that plaintiff has standing to

seek direct retrospective tuition payment to the Center. As an initial matter, we

30 note our agreement with plaintiff and her amici that E.M.’s claimed denial of a

FAPE constitutes an injury in fact, and not merely a “grievance,” as the

Department contends. But we need not decide today the thorny question

whether the denial of a publicly funded FAPE, standing alone, is an injury that is

“redressable” by an order requiring the Department to pay the child’s private‐

school tuition directly.17 Rather, the record provides a narrower ground for our

decision, albeit one the district court did not reach in the first instance.18 In our

view, plaintiff has adequately demonstrated that, as a result of the Department’s

alleged failure to provide a FAPE, she has incurred a financial obligation to RFTS

under the terms of the enrollment contract. Plaintiff’s contractual obligation

itself constitutes an “injury in fact” for Article III purposes, one that is

“redressable” by the direct tuition payment she seeks.

17 We therefore express no opinion on the standing analysis espoused in S.W. (and relied upon by the district court below), resting solely on the IDEA’s statutory language requiring that a FAPE be provided “at public expense.” See S.W.,

; E.M.,

, at *6.

18 We may, of course, affirm the district court’s decision on any ground sufficiently presented by

the record. See Olsen v. Pratt & Whitney Aircraft,

(2d Cir. 1998) (“It is well settled that we may affirm on any grounds for which there is a record sufficient to permit conclusions of law, including grounds not relied upon by the district court.” (internal quotation marks omitted)).

31 Relying on the language of the contract as well as extrinsic evidence such

as Levy’s affidavit and plaintiff’s financial condition, the IHO and the SRO

concluded that the agreement between the parties did not actually require

plaintiff to pay N.M.’s tuition to RFTS, and therefore supplied no basis on which

plaintiff could assert standing to sue for direct payment.19 Although “[w]e must

give due weight to the state proceedings, mindful that we lack the specialized

knowledge and experience necessary to resolve questions of educational policy,”

R.E. v. New York City Dep’t of Educ.,

(2d Cir. 2012) (internal

quotation marks and alteration omitted), we need not defer to the findings of

state administrative officers on questions, such as contract interpretation or the

requirements of standing, that fall outside of their field of expertise, see M.H. v.

New York City Dep’t of Educ.,

(2d Cir. 2012) (observing that the

weight due administrative determinations “will vary based on the type of

determination at issue”); see also Lillbask ex rel. Mauclaire v. Conn. Dep’t of Educ.,

(2d Cir. 2005) (explaining that the “due weight we ordinarily

must give to the state administrative proceedings is not implicated with respect

As noted supra, the IHO and SRO also found that, because plaintiff had not paid any tuition 19

out of pocket, she lacked standing to seek tuition “reimbursement.” J.A. 129, 192. On appeal, however, plaintiff has made clear that she is not seeking “reimbursement,” in the literal sense, for herself, but rather “direct payment” of tuition to RFTS. 32 to issues of law” (internal quotation marks and alterations omitted)). These

matters fall within the purview of the lawyer’s expertise, not that of the educator.

In this case, we disagree with the IHO’s and SRO’s analysis, for Article III

standing purposes, of the contractual arrangement entered into by E.M. and the

Center. We conclude, first, that E.M. has made an adequate showing, based on

the unambiguous language of the enrollment contract, that she is obligated to

pay (or, at the very least, risks potential civil liability should she fail to pay)

tuition to the Center, regardless whether she is successful in obtaining funding

from the Department under the IDEA. In our view, that financial obligation,

incurred as a result of an allegedly inadequate IEP, satisfies the requirements for

standing. But even assuming, as the administrative officers did here, that E.M.

has no obligation to pay tuition unless and until she succeeds in her litigation

against the Department, we nonetheless conclude that E.M. has standing to bring

this claim based on the implied contractual obligation to use her best efforts to

pursue her statutory remedies to repay the tuition that the Center has, in effect,

“loaned” to her during the 2008‐2009 school year. Our reasoning is explained

below.

33 a. Plaintiff’s Contractual Obligation to Pay Tuition Absent Success in Her IDEA Litigation Against the Department

First, contrary to the determinations of the IHO and SRO, we conclude that

E.M. has standing to pursue a claim for direct payment under the IDEA based on

her contractual obligation to pay private‐school tuition. E.M. has made an

adequate showing that her contract with the Center requires her to pay tuition

even if her IDEA claim against the Department fails to result in funding.

A plain‐language reading of the written enrollment contract, see Kass v.

Kass,

, 566‐67 (1998),20 reveals that plaintiff has accepted a legally‐

enforceable obligation to pay tuition to RFTS. Indeed, pursuant to that contract,

plaintiff has assumed, without qualification, “complete financial responsibility

for the enrollment” of her child at the Center, and “agree[d] to pay” tuition and

fees. J.A. 759. Thus, unlike the plaintiff in S.W., whose enrollment contract with

the private school “plain[ly] . . . relieved [the parent] of financial responsibility in

the event that the [the Department] refused to pay her son’s 2005‐2006 tuition,”

S.W.,

, E.M.’s written contract with the Center nowhere

conditioned her tuition liability on her ability to obtain funding from the

Department, cf.

at 357‐58 (concluding that parent lacked standing to seek

20 There is no dispute that New York law governs the enrollment contract at issue. 34 direct payment under the IDEA based on any financial indebtedness to the

school where the enrollment contract expressly provided that parent was

“dependent upon receiving prospective payment from [the Department] . . . in

order to make the payment of tuition,” and that the school “has assumed the risk

that the Parent may not receive prospective payment from [the Department]”

(alterations omitted)).

It is true that certain portions of the enrollment contract — including the

payment schedule and the deposit amount — were left blank. See J.A. 759. But

we are not persuaded that these blank spaces, in a standard‐form contract,

render the parties’ entire agreement void. The contract’s essential terms —

namely, the educational services to be provided and the amount of tuition —

were plainly set out in the written agreement, and we cannot agree that the

contract, read as a whole, is so vague or indefinite as to make it unenforceable as

a matter of law. See, e.g., Best Brands Beverage, Inc. v. Falstaff Brewing Corp.,

, 587‐88 (2d Cir. 1987) (“Although courts are loath to refuse enforcement

of agreements on indefiniteness grounds, if the terms of the agreement are so

vague and indefinite that there is no basis or standard for deciding whether the

agreement had been kept or broken, or to fashion a remedy, and no means by

35 which such terms may be made certain, then there is no enforceable contract.”

(internal citation and quotation marks omitted)); Cobble Hill Nursing Home, Inc. v.

Henry & Warren Corp.,

, 482‐83 (1989) (stating that the requirement

of definiteness “is necessarily flexible, varying for example with the subject of the

agreement, its complexity, the purpose for which the contract was made, the

circumstances under which it was made, and the relation of the parties”).21

The administrative officers, however, rejected this plain‐language

interpretation of the enrollment contract based primarily on Nancy Levy’s

statement in her affidavit that, as of November 12, 2008, “[n]o tuition has been

received for [N.M.] in accordance with an agreement that [E.M.] would contact

an advocate or attorney and seek funding” from the Department. J.A. 758. The

IHO and SRO appeared to treat Levy’s testimony as evidence of an oral side

agreement between the parties that modified the terms of the enrollment contract

so that E.M. would not be required to pay tuition unless and until she recovers a

Moreover, it is undisputed that the Center fully performed its obligations under the 21

enrollment contract by providing the promised educational services during the 2008‐2009 school year. Thus, even if the writing itself is incomplete, the Center’s performance of its contractual obligations (and plaintiff’s acceptance of them) arguably evidence a mutual intent to consummate the agreement, thereby triggering plaintiff’s reciprocal obligation to pay tuition. See, e.g., Arbitron, Inc. v. Tralyn Broad., Inc.,

, 136‐38 (2d Cir. 2005) (noting that, under New York law, even where some terms are left open, so long as there is sufficient evidence that both parties intended to be bound, the agreement will be enforced). 36 judgment against the Department. See id. at 129, 191‐93. On that basis, the

administrative officers concluded that E.M. had no real stake in the outcome of

this litigation, and therefore lacked standing to pursue her claims. See id. at 130,

193‐94. We disagree with that assessment.

To begin, the IHO’s and SRO’s reliance on the Levy affidavit to rewrite the

terms of the enrollment contract is misplaced. Although Levy testified that E.M.

had not yet paid tuition “in accordance with an agreement” to seek funding

under the IDEA, J.A. 758, Levy’s affidavit is silent on E.M.’s payment obligations

should her efforts to obtain public funding fail; indeed, there is nothing in the

record to suggest that, if plaintiff’s IDEA claim proves fruitless, she is

automatically relieved of her contractual promise to pay tuition, cf. S.W.,

(parent lacked standing based on financial indebtedness where

the enrollment contract “plainly relieved [parent] of responsibility for the cost of

her son’s tuition”). Thus, while the Levy affidavit may be evidence that the

Center agreed to forbear on payment during the pendency of plaintiff’s IDEA

litigation against the Department, we cannot conclude that its current

forbearance conclusively evidences an intention to waive its contractual rights

altogether or to forgo enforcement in the future: so long as the limitations period

37 has not run, a creditor’s willingness to be patient with a debtor does not, by itself,

render this debt unenforceable as a matter of law. See, e.g., WMW Mach., Inc. v.

Werkzeugmaschinenhandel GmbH IM Aufbau,

, 748 n.11 (S.D.N.Y.

1997) (stating that, under New York law, “[t]he intention to waive [contractual

rights] must be clearly established and cannot be inferred from doubtful or

equivocal acts or language” (citing E. 56th Plaza, Inc. v. Abrams,

(App. Div. 3d Dep’t 1983))); see also Beth Israel Med. Ctr. v. Horizon Blue Cross

& Blue Shield of N.J., Inc.,

, 585 (2d Cir. 2006) (“[W]aiver requires a

‘clear manifestation of an intent by plaintiff to relinquish her known right’ and

‘mere silence, oversight or thoughtlessness in failing to object’ to a breach of the

contract will not support a finding of waiver.” (quoting Courtney‐Clarke v. Rizzoli

Int’l Publ’ns, Inc.,

(App. Div. 1st Dep’t 1998))).

Moreover, even if the Levy affidavit could be interpreted to suggest that

the parties orally agreed to modify the written enrollment contract to relieve

E.M. of tuition liability, it is unclear whether E.M. could effectively rely on that

purported modification to defend against an action on the contract, should the

Center later sue her for nonpayment, or (hypothetically) if the Center should

change management, or if it should enter bankruptcy and the trustee seek to

38 collect. Notably, the written enrollment contract signed by both parties

contained an express merger clause, which provided as follows: “This

Enrollment Contract contains the entire material terms and conditions” and “no

others will be deemed valid unless they are contained in an express writing

signed by [the parent] and the School.“ J.A. 761. Accordingly, as a matter of

New York law (which governs the enrollment contract), any side agreements

between the parties that were not reduced to a signed writing do not — and

indeed cannot — modify or negate plaintiff’s legal responsibility under the

contract to pay the cost of tuition. See, e.g., Schron v. Troutman Sanders LLP,

(2013). Thus, because the written enrollment contract appears to

be enforceable notwithstanding any purported oral modifications, E.M. has, at

the very least, demonstrated a well‐founded basis for fearing exposure to suit for

nonpayment. See, e.g., Ross v. Bank of Am., N.A. (USA),

(2d Cir.

2008) (stating that injury in fact “is a low threshold,” and “may simply be the fear

or anxiety of future harm” (internal quotation marks omitted)); cf. S.W.,

(observing that “potential civil liability can constitute an injury in

fact,” but concluding that the plain language of the enrollment contract at issue

there “relieved [the parent] of financial responsibility”).

39 In light of the above, we conclude that E.M. has made an adequate

showing, for standing purposes, that she is subject to a contractual obligation to

pay private‐school tuition to RFTS, and that she incurred that obligation as a

direct result of the Department’s alleged failure to provide her child a FAPE.

That contractual obligation amounts to an injury in fact that can be redressed by

a favorable decision in this case: if (after the underlying merits question is

adjudicated) the Department is required to pay N.M.’s tuition at RFTS, then

plaintiff is no longer obligated to do so. Once relieved of that obligation, she no

longer risks being sued for nonpayment or suffering any of the negative effects

associated with carrying such a debt.22 In short, a favorable decision would

make plaintiff whole. Under these circumstances, E.M. has satisfied Article III’s

standing requirements, and may pursue her claim against the Department.

b. Plaintiff’s Contractual Obligation to Seek Funding Under the IDEA to Repay Tuition “Loaned” to Her by the Center

Second, even assuming, arguendo, that the oral agreement alluded to by the

administrative officers below did modify the enrollment contract, so that E.M. has

no obligation to pay tuition unless she succeeds in her IDEA litigation against the

These might include, for example, effects on her borrowing capacity for other purposes, or her 22

relationship with the Center in future years, both with respect to N.M.’s education and the education of one or more of her other children. Indeed, the record reflects that E.M. is the mother of a second, severely disabled child. See J.A. 536‐37. 40 Department, we nonetheless conclude that E.M. has standing to bring her claim

for direct payment. Even under such a modified contractual arrangement, E.M.

has impliedly promised to use her best efforts to pursue her statutory remedies

to recoup the cost of tuition and repay the Center. And while this arrangement

means the Center — rather than E.M. — ultimately bears the risk that E.M.’s

litigation against the Department will be unsuccessful, we are not persuaded that

this fact necessarily renders the Center the real party in interest, as the

administrative officers concluded, or that it otherwise prevents E.M. from

pursuing her remedies under the IDEA. Rather, such an arrangement may fairly

be interpreted as a “loan” provided by the Center to E.M. — in the form of

tuition — with forbearance in exchange for her promise to pursue recompense

from the Department that will, in turn, extinguish her debt.

An agreement of this type is roughly analogous to a familiar insurance

arrangement known as a “loan receipt.” See, e.g., 16 COUCH ON INS. § 222:91 (3d

ed. 2012). Under such an arrangement, when an insured suffers a loss at the

hands of a third‐party tortfeasor, “the insurer lends the insured the amount due

on the policy, and the insured pays it back only to the extent that the insured is

able to obtain a recovery against [the third‐party].” Wright, et al., 6A FED. PRAC.

41 & PROC. § 1546. Although the insured is, in essence, suing for the benefit of the

insurer, by virtue of the loan receipt the insurer “has not paid the insured’s claim

and therefore is not subrogated to the insured’s rights.” Id. Thus, the insured —

not the insurer — has been recognized as the proper party to bring suit. See 16

COUCH ON INS. § 222:91 (“Under the loan receipt relationship, the insurer does

not have standing to sue the third party and any such actions would be

dismissed for lack of standing or failure to state a cause of action.”).

The loan receipt arrangement has long been judicially accepted as a valid

mechanism for providing coverage for an insured’s losses while allowing her to

sue tortfeasors in her own name. See, e.g., Luckenbach v. W.J. McCahan Sugar

Refining Co.,

(1918) (describing the loan‐receipt arrangement as

“consonant both with the needs of commerce and the demands of justice”); Aetna

Ins. Co. v. Henry Du Bois Sons Co.,

(2d Cir. 1944) (stating that “a

[loan] receipt is a lawful contract which will be enforced”); see also Columbia

Grain, Inc. v. Or. Ins. Guar. Ass’n,

(9th Cir. 1994) (explaining that

“with a loan receipt, the insured makes the claim against the third party but may

be contractually bound to give the money recovered to the insurer”).

42 Viewed in this light, the reality that the Center ultimately bears the risk of

plaintiff’s non‐recovery from the Department is merely a consequence of the

contractual arrangement between it and E.M., and does not dislodge E.M. as the

real party in interest. Cf. 17 COUCH ON INS. § 241:42 (“An insured, who agrees to

sue the one responsible for the damage for the benefit of the insurer, may bring

an action for such damages in his or her own name without violating a statutory

provision requiring every action to be brought in the name of the real party in

interest.”). Further, unlike the insurance payments made to the private

educational facility in Emery, which left the plaintiff there with no obligation of

record either to the school or the insurer, the Center’s “loan” arrangement with

E.M. obliges her to pursue diligently her statutory remedies under the IDEA, and

to remit to the Center any recovery she might obtain as a result of her litigation

against the Department. Thus, if E.M. prevails on her claims, and is awarded

funding from the Department, she will not receive a “windfall,” cf. Emery,

; rather, she will merely repay a debt incurred as a result of the

Department’s allegedly inadequate IEP.

In sum, we conclude that, because of her contractual obligation to pay

tuition to the Center, E.M. has standing to pursue this claim against the

43 Department, even if the Center may choose not to act upon that obligation unless

and until E.M. prevails in her litigation against the Department.

Of course, that plaintiff has standing to pursue her claim does not mean

that she is entitled to the relief she seeks. As we have noted, even if a plaintiff

satisfies the Burlington‐Carter prerequisites, “because the authority to grant

reimbursement [under the IDEA] is discretionary, ‘equitable considerations . . .

are relevant in fashioning relief.’” Frank G., 459 F.3d at 363‐64 (quoting

Burlington,

); see also Forest Grove Sch. Dist. v. T.A.,

,

246‐47 (2009) (stating that, even if a plaintiff establishes a right to reimbursement

under the IDEA, “courts retain discretion to reduce the amount of a

reimbursement award if the equities so warrant”). In making that equitable

determination, the district court may consider many factors, including, inter alia,

whether plaintiff’s unilateral withdrawal of her child from the public school was

justified, whether plaintiff provided the Department with adequate notice of the

withdrawal, whether the amount of private‐school tuition was reasonable,

whether plaintiff should have availed herself of need‐based scholarships or other

financial aid from the private school, and whether there was any fraud or

collusion in generating (or inflating) the tuition to be charged to the Department,

44 or whether the arrangement with the school was fraudulent or collusive in any

other respect. These factors, however, bear not on our standing analysis under

Article III, but on the equities of plaintiff’s claim for relief.

II. Merits

Having concluded that plaintiff has standing to pursue a claim for direct

tuition payment to the Center, we now turn to the merits of this dispute. The

district court determined that E.M. failed to establish that N.M.’s IEP was either

procedurally or substantively inadequate. See E.M.,

, at *7‐10.

Most important for our purposes here, during the course of its analysis of the

substantive adequacy of the IEP and whether a 6:1:1 classroom setting would

provide an appropriate education, the district court appeared to credit evidence

submitted by E.M. that her daughter needed “constant supervision.”

(internal quotation marks omitted). But the court concluded that the SRO had

not erred in approving the 6:1:1 setting. In so doing, the SRO relied in part on

testimony from a teacher at N.M.’s proposed public school classroom that the

child would be provided with sufficient supervision in the classroom setting —

supervision that would approximate 1:1 when needed. See

. The teacher

offered testimony, as described above, “about the nature of the placement

45 actually offered for N.M. in the IEP.”

(emphasis added). According to the

court, “[i]t was not error for the SRO to consider such evidence.”

In making

this determination, however, the court noted that, as of the date of its decision,

there had been no case from within the Second Circuit “that st[ood] for the

proposition that an SRO may not consider evidence extrinsic to the written IEP.”

That context has now changed. In 2012, our Court issued an opinion in

R.E. v. New York City Department of Education,

(2d Cir. 2012), in

which we expressly addressed whether a district court or state officer may

consider and rely on evidence extrinsic to the IEP when deciding whether an

educational program provides a disabled child with a FAPE, and adopted “the

majority view that the IEP must be evaluated prospectively as of the time of its

drafting and . . . that retrospective testimony that the school district would have

provided additional services beyond those listed in the IEP may not be

considered.”

. By way of example, we explained that “testimony may

be received that explains or justifies the services listed in the IEP,”

but the

district “may not introduce testimony that a different teaching method, not

mentioned in the IEP, would have been used,”

at 186‐87.

46 Particularly relevant to this case, we noted in R.E. that “if a student is

offered a staffing ratio of 6:1:1, a school district may introduce evidence

explaining how this structure operates and why it is appropriate.”

. But

“[i]t may not introduce evidence that modifies this staffing ratio (such as

testimony from a teacher that he would have provided extensive 1:1 instruction

to the student).” Id.; see also C.F., 746 F.3d at 79‐80 (“Because the IEP must be

evaluated prospectively, without recourse to retrospective testimony, the

Department cannot cure [a deficient IEP that failed to include parent counseling

or training] by offering testimony that counseling and training would have been

offered.” (citing R.E.,

)). This rule reasonably protects parents who

must assess a proffered IEP without the benefit of after‐the‐fact testimonial

modifications.

Here, the SRO relied on testimony from N.M.’s proposed teacher that (as

the SRO characterized it) explained how the teacher could “make sure that either

[the teacher] or a paraprofessional worked with the student at all times, having

done so previously for another student during the first two months of the school

year.” J.A. 136. In other words, the SRO relied expressly on the possibility,

extrinsic to any written education plan, that the teacher in the proposed 6:1:1

47 classroom would provide 1:1 services beyond those specified in the IEP —

precisely what R.E. determined to be impermissible.

The parties urge us to reach the merits of this case notwithstanding this

error. We certainly appreciate their desire to resolve this case now without

further litigation, with its attendant delays and costs. But we must decline this

invitation. It would be imprudent for this panel, without any educational

expertise, to decide the merits of E.M.’s claim on a cold record. Cf. M.H.,

(stating that a court’s review of administrative findings in the IDEA

context must “be colored by an acute awareness of institutional competence and

role”). We agree with E.M. that considerable record evidence supports the

conclusion that, in the 2008‐2009 school year, N.M. needed constant 1:1 care to

progress. But, as the Department points out, both the Committee social worker

and the teacher in the recommended classroom testified that N.M. could

progress in a 6:1:1 classroom. We are simply not in a position to cull from this

testimony the evidence that R.E. permits us to consider and then determine

whether that testimony is credible and persuasive, particularly when the IHO

did not address those questions at all.

48 For these reasons, we remand this case to the district court for further

proceedings consistent herewith. That court might, in its discretion, either

decide the merits of the IEP claim, or, perhaps more profitably, remand the

matter to state administrative officers for a complete reexamination in light of

our instructions in R.E. See T.L. v. New York City Dep’t of Educ.,

(E.D.N.Y. 2013) (“A court may remand a proceeding when it needs

further clarification or does not have sufficient guidance from the administrative

agencies.” (citing cases)). On remand, the district court is free to reexamine any

part of its prior analysis, and any other arguments that it did not need to address

in its initial decision.

CONCLUSION

We conclude that, in light of her contractual obligation to pay tuition to the

Center, E.M. has Article III standing to pursue her direct‐payment claim against

the Department. We further conclude, in light of intervening authority, that the

district court erred in affirming the SRO’s determination that the December 2008

IEP provided a FAPE. We therefore VACATE the judgment entered by the

district court and REMAND the cause for consideration of the merits or further

49 proceedings by the state administrative officers in light of our decision in R.E. v.

New York City Department of Education,

(2d Cir. 2012).

50